GO
Loading...

End of Wal-Mart Layaway Hurting Discount Giant?

Monday, 11 Dec 2006 | 1:36 PM ET

In today's credit card society--layaway has all but gone away. The latest to join this trend is Wal-Mart . The discount giant says it will discontinue the service at all its stores by the end of this year. Some are accusing Wal-Mart of turning away from its core customers. And others are saying this decision is hurting Wal-Mart's troubled stock even more.

David Strasser is an analyst from Banc of America Securities and Jonathan Asher is President of Dragon Rouge USA. Both appeared on "Power Lunch."

Strasser believes that it's hard to say if stopping layaways hurts Wal-Mart but he says it's part of Wal-Marts efforts to expand its consumer base. He says the company doesn't really have the management team to match their ambitions. He says that while some customers may be hurt--the company is still offering discount items like the $4 prescription drug.

Strasser did say that Wal-Mart competitor Target is doing well--because its customers are doing well.

Asher says Wal-Mart is trying to move past its image--and that's difficult to do. He says the company should try and walk a fine line between reaching out to new customers and keeping the old. He says the company is more than likely growing too fast. Asher says Wal-Mart could focus on such issues as better product mix and store design.

Analyst disclosure: Banc of America Securities has had or has investment banking and other business with WMT and TGT. It owns more than 1 percent of stock in each.

  Price   Change %Change
TGT
---
WMT
---

Contact

  • Showtimes

    United States
    Monday - Friday 1:00P ET
    Europe
    Monday - Friday 18:00 CET
    Asia Pacific
    Tuesday - Saturday 01:00 SIN/HK
    Australia
    Tuesday - Saturday 03:00 AEST
  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • Tyler Mathisen co-anchors CNBC's "Power Lunch." Mathisen also co-anchors "Nightly Business Report produced by CNBC."

Power Pitch

Kenny Polcari